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Zoetis Inc.’s (ZTS - Analyst Report) third quarter 2013 earnings (excluding special items) of 34 cents per share fell short of the Zacks Consensus Estimate by a penny. Third quarter 2013 earnings were 10% above the year-ago figure. Higher revenues aided results in the reported quarter.

Revenues at Zoetis climbed to $1.1 billion in the third quarter of 2013 from $1 billion recorded a year ago. Foreign currency movements adversely impacted revenues during the quarter by 1%. Revenues edged past the Zacks Consensus Estimate of $1.07 billion. We note that Zoetis is the former Animal Health business of Pfizer Inc. (PFE - Analyst Report). Zoetis started trading on the New York Stock Exchange from Feb 1, 2013.

Zoetis boasts of a robust and diversified product portfolio. The product portfolio is divided into five categories – anti-infectives, vaccines, parasiticides, medicated feed additives and other pharmaceuticals for veterinarians and livestock producers.

Zoetis markets its offerings primarily across 8 species: cattle, swine, poultry, sheep and fish (livestock) and dogs, cats and horses (companion animals). In the third quarter of 2013, sales of livestock products accounted for 64% of total revenues. The balance came from the companion animal products.

Geographically, the company operates in four segments- the U.S, Europe/Africa/Middle East (EuAfME), Canada/Latin America (CLAR), and Asia/Pacific (APAC). Sales improved in the U.S. (10%), EuAfME (12%), CLAR (4%) and APAC (1%) markets. The growth rates are inclusive of foreign exchange impact.

2013 Outlook Modified

Zoetis updated its earlier provided guidance for 2013. The company now expects revenues in the range of $4.475-$4.525 billion (old guidance: $4.425 billion-$4.525 billion). The current Zacks Consensus Estimate stands at $4.48 billion. Zoetis narrowed its adjusted earnings guidance range for 2013 to $1.38-$1.42 per share from $1.36-$1.42 per share. The pre-earnings Zacks Consensus Estimate is $1.40 per share.

Zoetis currently carries a Zacks Rank #3 (Hold). Companies like Actelion Ltd. (ALIOF) and Isis Pharmaceuticals, Inc. (ISIS - Analyst Report) appear to be well placed with a Zacks Rank #1 (Strong Buy).

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